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tv   Markets Now  FOX Business  August 23, 2013 1:00pm-3:01pm EDT

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today. ahead, we will have the economist choice for the next fed chairman. the new batman is a cruel joke. time for stocks now as we do every 15 minutes. a lot better day right now than it was 24 hours ago. nicole: yesterday we survived through the flash crash. right now, you can see all of the major averages are holding on.
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actively now looking both internally and externally for a new ceo. you can see right now that the stock is up 6.7%. we have had a lot of movers. tracy: thank you, nicole. we have that on this. rob, you are saying that there is no right time. you just decided it was time to go. >> a major reorganization. typically, you are in while it takes time to complete the process.
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tracy: that is kind of interesting. second class citizens to facebook now. what is happening here? >> well, he actually did a number of things right. he made a number of mistakes as well. that is why you look at their one big major mistake. you do not look at any of their successes. they were very successful. he got them out from underneath. the huge problem they had. he finally fixed the organizational problem. in the end, he got three of
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them. seeing as a wonder inside the company. he would be an excellent choice. outside the company, there are probably three people that could be picked. fully trained to be a ceo. has been a ceo for a little
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while. the other is bill, ex- microsoft. over at hp. he was just promoted. he has the skill set to run microsoft if they need it. tracy: anyone like marissa mayer that could fire up the market about it? the stock is on a tear since she has taken office. are any of the people that you mentioned enough to take that? >> both of them brings a certain amount of different thinking to the market. to be specific, he was the visionary at intel. he was the ceo there during their most successful years.
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remember, microsoft is a very complex, big company. if you bring in somebody from the outside, they will probably hit microsoft culture and they will bounce badly. you need somebody who understands how to work a big complex company. let's just be clear, i do not think anyone thought it was a really good idea. tracy: we will see you soon, sir. thank you very much. >> my pleasure. adam: liz claman spoke with nasdaq's ceo earlier. >> it had nothing to do with hacking.
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it had nothing to do with the problem yesterday. liz: it indicates to some people that you guys do not have your arms wrapped around everything. >> our system by itself was working. we have to handle bad actions from some of those people connect it to us. we are deeply disappointed. one of the reasons it took three hours was we have a first and foremost responsibility for fair and orderly markets. we made sure that the entire industry was ready to come live. we did come live. we can live quite successfully. adam: we have an analyst for morningstar joining us now.
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he says it was not the system, but the connection that was the problem. there are some particular phrases that he uses. >> i think it is a little unclear. perhaps he means the changes somehow went awry. adam: when he says defensive driving, he denies there was any hacking going on here. there was some kind of external bad behavior on someone else? >> i do not have all of the facts. my take is that, i think, he is just referring that the systems
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interact properly. adam: are you hearing from other participants. >> over the longer term, i would disagree with that statement. i think market our disappearance will clearly be asking questions. when you are on the road, they will be asking hard questions. i think that nasdaq will remain a pretty strong competitor. adam: you bring up roadshows. let's bring up twitter. do you even take the phone call? >> i am not sure what is exactly going on there.
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i think you owe it to your shareholders and your board. i think you owe it to your investors. i think you definitely have to look at both markets. adam: what are the questions that we need to be asking? >> i think it would be nice to have a little bit more information. we want to make sure this sort of thing does not happen again. tracy: we have a business alert for you.
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july sales dropped more than 13%. that is the largest of client since may 2010. those rates continue to climb. maybe i am old-- this is low. newsflash, these rates are still low. adam: yes, but they were lower. people want a good deal. make it on her dime. taxpayer dollars spent promoting fish eggs from idaho.
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that is like so also from new york city. [laughter] adam: driving america towards a national debt. tracy: try the online travel industry. striking a deal to stay competitive. find out what it means for you or next trip. ♪ you know throughout history,
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if your bank doesn't think you're special anymore, you need an ally. ally bank. your money needs an ally. tracy: we have to check on the market. we have nicole petallides on the floor of the new york stock exchange. sandra smith on the cme. sandra, welcome to the mommy club. we are going to nicole petallides first. she is watching expedia. nicole: up about 6.5% at the moment. it is a long-term marketing agreement with travelocity.
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the stock is reflecting that people are really loving this idea. travelocity will focus the efforts on promoting the branding and marketing as well. back to you. adam: thank you, nicole. now we will go back to the cme. sandra smith. sandra: the best we can do is report the fact that there are a lot of calls including barclays analyst.
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we are looking up $1400 a trail ounce. it is still down about 18% so far this year. we will get the flight to safety there are other uses than just jewelry. platinum prices hitting a four-month high. a lot of folks looking for somewhere else to put their money. they believe in the short term we could still see some pullback in gold prices.
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gold has found a bottom and is going higher. i know a lot of people that will contradict that statement down here. adam: good to have you back. sandra smith on the floor of the cme. tracy: the fed big meeting without the chairman, bernanke. who will replace him? we have the odds on favorite next. adam: just as controversial, ben affleck just the new batman. ♪ righnow, 7 years of music is being streamed.
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♪ >> 21 minutes past the hour. a wild fire roughly three times the sales of san francisco is in yosemite park. it has quadrupled in size over the past 24 hours to more than 125,000 acres.
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supporters of ousted egyptian president are protesting in cairo. the demonstrations have forced them to be deployed around the city. major sources they are say there have been no reports to violence. an online ban of online sales of e cigarettes. they could pose a health threat. they hope this will help keep them out of the hands of minors. back to adam. adam: thank you. bernanke may be absent from the jackson hall meeting this year. that is not stopping talk of when tapering will begin. peter barnes has more. peter: i talked with dennis
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lockhart the president of the atlanta revenue bank this morning and he said he would not rule out starting to wean the economy off of quantitative easing at the fed's policy meeting in september. >> that outlook that i have in mind and that is that the economy will improve a little bit in the second half. inflation numbers will begin to edge towards our target of 2% and move up gradually. unemployment will come down. the jobs picture will continue to produce net jobs of 175-200 per month. if that outlook holds, i think we can consider beginning to wean the economy from quantitative easing.
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peter: we will be talking to a lot more of the attendees. christine lagarde the director of the international monetary fund, we will get her take on how all of these bailouts in europe are proceeding. back to you. tracy: peter barnes from one of the most beautiful spots in the country. bernanke is absent from jackson hole. >> what i found interesting is a lot of people have been talking about the need to be a team player. i think larry summers history is showing that is not really his forte.
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it is more a herd of cats. that is why bernanke is so good. that probably prepared him for the fed. that is why yellen is so tempting for people. most people think that she can probably do that kind of job. the other candidates, he clearly qualified for the job. the question is, does he want it? of course, you also have to think about former head vice chair. the other thing, he is also a lawyer. given the increase, maybe it would make sense to have someone
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that could speak both languages. tracy: we have been hearing he would probably be quicker to raise rates. is that part of what worries everybody? >> it does not worry me so much. most of larry summers positions have been political in nature. i find it hard to believe that the president does not have a good understanding of exactly what he would be doing when he got into the office. the president will know what larry summers may be thinking in that regard more than anyone else would. i have to think that their interests may be aligned. tracy: do you think we are at a place where september tapering will probably happen?
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>> i think that we are. if things develop as we expect, we will move ahead with tapering before the end of the year. we are at 7.4 now. we have a couple months left to go. i think if you look at all the things going together, we are really in a position where the fed can taper. tracy: the market is almost more concerned about who the next leader will be. we kind of know that it is coming. everyone keeps saying that it is baked in. is it more about who will do the tapering now? >> what happens when new fed chairman come in? it does not matter who they are.
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people shy away from riskier assets. it has very little to do with whether or not you think the person coming in is qualified or not. it is much like being president. you come out a different person. it is impossible for us to predict whether yelling or summers would be a better chairperson. tracy: thank you for coming in. >> thank you. adam: the world's second largest stock exchange. what they are saying now. tracy: brian jacobson on if it will chill investor confidence. adam: take a look at who is up and who is down on the down right now. ♪
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our trading specialists are waiting to help you get started. tdd#: 1-800-345-2550 so call now. tdd#: 1-800-345-2550 tracy: time for stocks as we do every 15 minutes. we head to the floor of the stocks exchange. nicole petallides watching pandora, huh. >> we're watching pandora which obviously gained some listeners and have lots of fans. even revenue did well but some expenses have gone up. look at shares because they are unpressure. down 11.7% today for pandora. as i noted the revenue did actually exceed expectations but the costs they have been facing have been on the rise. the company also backtracked on that 40-hour monthly limit. so that is something that is good for all the papers of pandora. as far as what the analysts are saying, well, jpmorgan says that pandora remains a compelling play on mobile. and raised its price target to
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$25 up from 23 and kept their overweight rating on the stock. at $19 they believe there is upside potential. piper jaffray raised target to 27 bucks. downgraded, two names, stifel and raymond james. thank you. tracy: see you in a bit. in the fallout from nasdaq's three hour flash freeze both the president and treasury secretary lou have been briefed and actions from regulators are slowly taking shape. what is next how washington will ultimately respond, our very own rich edson standing by in d.c. with details. rich, you were all over this yesterday. what is going on now? >> tracy the flash freeze may eventually that you cyber gridlock on regulations. the flash freeze reminds regulators and lawmakers on the risks of relying on computer systems. >> it's a significant enough concern that they want to make the president aware and keep him
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apraised of the situation and it highlights what a number of people have been talking about which is that the more technologically-driven our economy is, especially these high speed trades and, you know, smart grid, et cetera, the more vulnerable are we to potential interruptions. >> now to the regulators, people familiar with the matter tell fox business, commodities future trading commission is looking for new rules for high speed computer changes. sec chairman mary jo white plans to hold a meeting with marketing officials and nasdaq about the marketing freeze. they plan to have new standards and fines for electronic trading networks t would require them to test their systems and design plans for failures. house services and staff there are examining the issue. tracy? tracy: rich edson, thank you very much. adam: for more on yesterday's nasdaq flash freeze and what is means for investors, brian
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jacobsen, wells fargo fund management. he is the chief portfolio strategist and he joins us now. get back to the question of nasdaq. have they thoroughly explained this to the satisfaction of investors and market participants? >> stock price reaction would suggest they haven't thoroughly explained or people didn't necessarily like the explanation they gave. we're not completely sure why it happened. what connectivity issue they had and what technology might have failed. so i don't think it was thoroughly explained but we'll getting more information about that over the next few weeks. adam: the fact when you're the second largest player in town people don't have much of an option, they will have to play with you, with nasdaq, correct. >> to an extent but remember there are all sorts of alternative trading venues. trading could have taken place on not only new york stock exchange and electronic data networks and bats and some dark pools as well. even though they are a big player they're not the only player and some of the traffic it can move to where it will continue to flow, let me switch
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gears a little bit to the u.s. economy. we got some not optimistic news about housing today. u.s. july single family home sales down 13.4%, largest decline since may of 2010 versus what we saw in june. what are we seeing here? did we see home sales come forward because of the potential for rising interest rates or something more sinister at play. >> i don't think there is anything necessarily sinister. i think we're seeing more of a return to what things should be like for the economy that we have. considering the slow pace of wage growth, the recent increase in mortgage interest rates it is about where you should expect to see new home sales come in. keep in mind with, we got on wednesday existing home sales. that showed dramatic increase in existing home sales. that is likely people trying to lock in deals both before rates began to rise again. we're actually somewhat seeing in the new home market what we could see in the existing home market when we get the next
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report with august sales which should come up in about a month. adam: so you would expect to see some kind of civilization or do you expect a the decline to continue? >> i expect with new home sales we'll stablize around 400,000. about where we are now. i think that is consistent where mortgage interest rates are now at the new higher level and with the slow place of wage growth. with existing home sales i think we're going to see a pullback in the activity there because a lot of people were trying to complete those contracts to lock in that financing. so we could see that drop pretty significantly in the upcoming report and it will be interesting because it could actually put the screws to the federal reserve to say they might want to postpone some of this tapering. adam: let me ask you about that. aren't we getting indications from some earnings reports from retail officers you talked about this but, target, missed3 expectations, wal-mart had a tough one and then you look at best buy. best buy beat on earnings because they caught. cut. it wasn't because they were selling more stuff.
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consumer seems strapped which going forward seems to be bad news for the u.s. economy. >> i agree. the strapped consumer is bad news for the economy, if you look let's say consumption relative to income it is about where it should be. unless you get a lot of income growth you're not going to get a lot of consumption growth and with consumption representing 71% of the u.s. economy, without consumption growth you don't get at love economic growth. i think unlike the fed, the fed thinks we'll experience an acceleration in economic activity towards the end of the year. i think that we're actually going to probably not necessarily flat line but stay about where we are. adam: which would not be sufficient to the sustain the dow or s&p 500 where it is at, is it? >> it is entirely the dow and s&p are actually fairly valued for that type of environment. i think right now at 1650, 1660 on the s&p 500 that is about pricing in slow economic growth for the balance of the year, around 1 1/2% to 2% economic growth.
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if we see anything higher than that then that would justify i think closer to 1120 to 1750 on the s&p 500. adam: okay. >> so the markets i think are actually properly pricing in slow economic growth. adam: brian jacobsen, from walls fargo, thank you very much. >> thank you. tracy: okay. so we have new details on the incredible ways the government is spending your money. you will not believe this. like robot nannies, they're making videogames. it is crazy. did we mention deficit? the heritage report has it all. you have to hear this to believe it next. adam: people are lining up to pay $4 million for 30 seconds of fun of the this time it is not the u.s. government. super bowl fever best nfl season even officially kicks off. ust m. protect youramily... and launch your dreams.
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retailers. aeropostale forecasting a deep third quarter loss. a highly promotional environment that led it to cut prices and decimating earnings will continue in the back to school shopping period. that is the latest from the fox biz network. we're always giving you the power to prosper.
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tracy: so a new report by the heritage foundation breaks down how the government is spending your money and the findings are like ridiculous. one of the report's author, she joins us now with her findings. you know, what i find the worst about this is so much fraud and double-dipping and, it begs the question, who is auditing the government? >> well, they are sort of auditing themselves. oversight hearings are happening in congress all the time, what
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happens after that is the question. tracy: right. >> congress fundamentally needs to use the power of the purse to impose fiscal discipline. tracy: we have prisoners getting unemployment checks. we have people double-dipping into social security. you know, aside from the other egregious nonsense we'll talk about in a second, this is stuff you can catch. this is stuff you can fix. who is doing this? >> so for example, with the unemployment benefit example, to prisoners, that happens a lot on the state level. there is fundamentally, they're failing to communicate to match the data who is in prison, who is applying for unemployment benefits. that should be an easy fix and more states are starting to do this now that we're talking about this more. tracy: i mean i guess that's a good thing. and some of the other stuff, okay, so we spend constantly, renovate the oval office. every new president does that i'm not so upset about that. i'm way upset about the fact we tried to create a robot to
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maintain a baby's attention and you can't after all. good luck with that. who was the genius for that one? study for college kids. we invest money, fair lee dickinson got $150,000 to determine why kids gain the infamous freshman 15. i will tell you. beer and late night pizza. they could give me 1 hundred thousand and call it a day. who allows this stuff to happen? >> think about the prom game as well. game to stimulate prom. week before prom. ask andy out on a date. is that something taxpayers should spend half a million dollars. it is available on facebook and only 220 likes. the public doesn't even like it. tracy: $300,000 to figure out the first bird on earth had black feathers. i guess it is good for history books but should we do all this stuff? who approves this? is it on a division by division level?
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i mean where, where is the consistency here and how do we put a stop to it? >> well, basically it is that agencies have too much money to go around, so they're not forced to prioritize. that is why it is so important that congress uses its power of the purse when they come back to @ashington after labor this september and budget for agency budgets. they need to stick to the caps under the budget control act. with the sequestration in place. it is starting to work. it is rooting out a lot of waste and lavish conference spending we heard so much in the news. tracy: thank you for bringing this to our. adam, we heard stories like this forever. the turtle bridge. you name it is craze sift i do think studying the freshman 15 is good comedy. adam: beer and pizza. the black feathers. first feathers were black. which means black is the new black not orange. weill go to the new york stock exchange to get out of this exchange. we join keith bliss who will
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bring us up to speed. dow is up -- software company out in washington, microsoft. the product is the same even though mr. ballmer will be leaving. they lost $900 million on the tablet which is appetizing as al can sellers. are they making a mistake? >> this has been a complaint about microsoft for a long time unfortunately for mr. ballmer has been his leadership. this is company wandering out in the desert for the last few years. the announcement of his resignation in last 12 months put some nice juice inside of the stock. they believe they will get a leader that will be more forward-looking and have better vision. hopefully they will bring in somebody a little bit like steve jobs an profell pell that company forward. it is a monster company with great products t needs to get in line with what it is doing on consumer side a little bit more inside of the space of mobile devices and get involved there a little bit more. it has great potential.
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people think with ballmer being removed it willful fill the potential. adam: you hear the names being tossed about investors or traders being word while discussing or are we too soon in the process who i will will be the next leader? >> i think they will start some pools around here pretty soon. we haven't heard any names that will be available. anybody with ambition and tech-savvy and knows what they can done inside the mobile space can raise their hands for the job. it is still a wonderful job and great company and has potential going forward. adam: keith bliss, new york stock exchange, thank you very much. >> my pleasure. adam: tracy? tracy: advertisers beware if you want a next spot in next year super bowl. the 2014 spots are already 85% sold. i can not wait for football. fox expects 90% will be sold by the time football quicks off in two weeks. fox has not commented what they are going for. media buyers say some of the top
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spots spend over $4 million each. that tops the 3.8 million that cb is charged for the big game last february. adam: those are government grants, those spots. >> i watched some ads last year. they were pretty good. they're not always good. adam: some of them bombed. tracy: the best ones are ones where they throw out with a contest and come up with a good ad. adam: i like the budweiser ads with clydesdales and horses. tracy: reallyany, the place where i grew up and. tracy: i guess. adam: you don't get teary-eyed? tracy: i don't get teary-eyed over nothing. i'm ready for football. adam: the twitter ivers exploding on word that ben affleck, sounds like the duck, aflac, will star in the next batman flick. tracy: why are some people so bent out of shape over this. let's take a look at some of today's winners and losers as we head out to break. no surprise microsoft is up there today.
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is tracy: ben affleck making the rounds of come big superhero versions. he was in dare very much dill and for warner brothers, in second version of the superman's "man of steel." adam: let's be happy for him. he will star as the caped crusader as they call him in the comics books along with henry calf develop, whoostars as superman. this could be a great franchise.
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superman, "man of steel," it is up to $650 million worldwide. 360 million of that overseas. so now you do a sequel to it of batman and superman. pair them together. ultimately you turn into justice league, warner brothers answer to the avengers. $1.3 billion for disney marvel. they have been looking for that. this could come out by 2014 and 2015. justice league featuring those two and a whole bunch of different actors. isn't ben affleck, kind of this boston regular guy, kind after nice guy and christian bale in "the dark knight" trilogy, they turned batman into much darker character. rolling stones to beatles superman. bubble gum. adam: he is a dark in real life. >> he really is. tracy: who is this batman for? is it for youtube or for like my son? if it is for my son, my son doesn't -- adam: have they jumped shark with all of this? >> i don't think they have. they're starting to build a really big franchise but did
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they pick the right actor? do you go with unknown guy to grow in the role and stick with it? christian bale was superhot. >> as a matter of fact the team has a suggestion for you. he is not unknown and all. there you go. adam: oh please. tracy: next one. adam: hardly. tracy: you're a man of wonder and -- adam: i see darts being thrown at that poster. >> if i could buy something would -- adam: i would buy that thing. you can't buy it. sell everything over on 8th avenue. tracy: when will we start talking about wonder woman? the chicks need wonder woman. >> wouldn't call them that but you can. you're a member of the tribe. that will come into the justice league. wonder woman and flash might join as well. tracy: we need girls. >> lots of guys and gals in tights. tracy: i'm not going there. thank you very much. adam: thank you, dennis. >> thanks, guys. tracy: coming up, making sense of the mixed signals on the housing market, on earnings, the fed and more. wells fargo tina adams shares
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tracy: welcome back, i'm tracy byrnes. ashley: i'm ashley webster. so long steve ballmer. investors cheering the microsoft chief's retirement plans. i'm sure that makes him feel great. will it end the lost decade for microsoft's stock? we'll look ahead. tracy: a ton of damage control for the nasdaq. they are embracing for the fallout from yesterday's three-hour freeze. fox senior business correspondent charlie gasparino has new details on this. ashley: ashley: housing shock. sales plunge as why one analyst tells us the sweet spot for housing may be over. tracy: top of the hour. time for stocks. nicole petallides on the floor of the new york stock exchange. i know you're watching microsoft
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shares, girl. >> i am indeed. they have been adding to the dow jones industrials by 15 positive dow points give or take. it is up over $2. that is a gain of 6.7%. this is a huge move for microsoft. this morning before the opening bell i was standing here quickly and said to me, steve balmer is stepping down. that is big news on wall street to have obviously a leader on wall street saying he is going to retire in the next 12 months. they're looking boeing internally and externally to figure out how to replace him. the company has done obviously reorganization and moving into smartphones and tablets and the like. this is nice one-year chart of it. he has been with the company over 30 years of the he really loves it and said so in memos and the like today. looking at markets across the board, dow is still below 15,000. 14,987. we have a gain today of 24 points.
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s&p 500 up one quarter of 1%. can't forget nasdaq especially after yesterday, especially after the "flash freeze," up one-third of 1%. it is a losing weekend on wall street which makes it three straight weeks of down arrows. back to you. tracy: nicole, see you soon. ashley: steve balmer giving up the reins of microsoft. is this a game-changer for the stock? joining me over the phone, a analyst at sanford bernstein mark, thanks for joining us. was ballmer forced out? did perhaps bill gates make this call? >> obviously there is no way of really knowing but my suspicion is that he made this decision on his own. he has been thinking about for a while and he talked about the fact that he would retire in roughly three years from now but the company is now making this massive transition to devices and to services. devices being enabling other people's devices and services being the cloud and that will take many, many years.
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with windows disappointing everyone including steve ballmer, he decided it's time to have someone else really drive this transition. ashley: who would be that someone else? is it someone outside the company, do you think? >> i don't know. there are, you know, a limited number about people who have expertise to be able to run and the pedigree to be able to run microsoft. you want someone who's going to be well-regarded by the street. someone who i will will be well-regarded within the industry. someone's whose knowledge of large software companies massively complex like microsoft is. someone who is ha the energy. someone who has the background in the cloud. there's a lot to this. i think there is a limited list of people who are out there. ashley: seems they road the pc wave to the beef and stranded themselves. they were way behind on mobile devices, on cloud computing that you just mentioned. ultimately does the company get split up between the consumer
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side and the enterprise side? >> i don't think so. i think that microsoft has reorganized the company to be able to combine all of the desktop operating systems or all the user face operating systems, windows, windows phone, xbox and will drive for synergies there to drive for better positions in those marketplaces but i think more important this is an enterprise story. this is the story of microsoft making a massive transition in enterprise to cloud and subscription that will drove significant eps revenue to the upside over the next 12 months and years. ashley: we talk about playing a guessing game, with regard to the stock it could be chaotic over the months as we deal with rumors and other headlines as we figure out who will take the reins. what do you think about the stock? >> so we believe there's a couple of catalysts about to occur. the company has called for a financial analyst day on september 19th. at the analyst day we believe the company is going to explain
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and discuss windows and say look, windows in the consumer space will be difficult for an extended period of time, accept that. corporate will be okay. they will go on and say look, let us explain the move to cloud and subscription. let us explain the economics here. we believe they are going to use to some extent the adobe playbook, in terms what adobe did explaining that transition. ashley: it will be interesting to watch. mark, thanks for joining us by phone. >> my pleasure. thank you. tracy: so let's get back to the latest on the nasdaq halt. so far system resisting normally today after yesterday's three-hour outage but nasdaq omx ceo bob greifeld spoke to fox business's liz claman about the company's earlier glitch and how can he get big names waiting to go-go public on nasdaq es special after this, and she mentioned one company in particular. >> you guys are considered the sexier exchange. >> yes. >> you have a lot of the
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dot-coms in the world. there are some that are not public yet. twitter, for example, everybody is waiting for that to go public. do you think you lost twitter? can you make a 30-second pitch to twitter to say here is why you should still consider listing on nasdaq? >> it is important to recognize we aspire towards perfection with respect to the operations of our systems and technology people, twitter and other companies recognize that. we will always fall short of that but we have to keep trying. and we get better all the time. and the number of perhaps have actually declined but probably as importantly, we have to make sure we handle problems in the proper way all right? so what we did yesterday, right, nobody wanted to be done for three hours and if we had been quite reckless we could have been up a lot sooner than that but i think the procedures we had in place, the industry had in place worked well. we would say to any technology-based company we're not perfect. we're 99.9% perfect. we're not perfect. we have problems but if we do we
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make sure we will maintain a fair and orderly market. that's what we did yesterday. tracy: well, fox business senior correspondent charlie gasparino has been all over this story. hey, charlie, talk about the fact what is so sexy about the nasdaq when they keep blowing deals like this? >> we should point out in any major computerized market, remember a lost order flow would go through the new york stock exchange, trading order flow and nasdaq has been around since the mid 80s, that type, new york stock exchange was mostly humans. now both the new york stock exchange and nasdaq deal with a lot more order flow on computers and i'm going to tell you this, there was a lot of fingerpointing going around. this will keep happening. >> right. >> it takes regulators to step in more than bob -- listen, bob greifeld did not like, do something stupid here that caused this. this is what happens with technology. it happens, it malfunctions. ashley: that happens, charlie. what about his reaction and nasdaq's reaction to what happened?
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we understand machines break. >> that's another story. he mentioned this sexy part. i don't believe the nasdaq has the sexy cachet. they used to. they used to be the stock market for silicon valley and you know, all the tech companies wanted to list there it is different now. it is all about getting into nasdaq 100. what is the main reason to get into nasdaq 100, to get into that index a lot of people, a lot of fund managers, buy the index. what it does it is a natural floor on the stock. facebook went down to $18 a share, stomped around there. been going up ever since. nasdaq 100, if you buy index buy the stock. tracy: good point. >> that is one of the reasons why they want to get into that. that is one of the biggest selling points nasdaq had for facebook winning the ipo over the new york stock exchange. in terms of his communication, i will say this bob greifeld did a great job communicating to wall street firms, what he believes is his major customers and i believe even probably his, you know, listing, companies that list on the nasdaq. i think he did a good job at
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that. there may be some quibbles they didn't get enough -- ashley: liz claman spoke to a number of ceos who had no clue what she was talking abouting, when she called them to get a comment. tracy: when it was down. >> they don't follow the stock price every 35 section like us. ashley: don't you think nasdaq could have sent some sort after email. >> yeah they told them. they got alerts. his from was not with that sort of class of people. i think bob did not do, i like bob. i think he is a very good manager. i think what he din do here was communicate to the average investors. tracy: yeah. >> they were pretty dark for about, pretty silent for hours in terms of the press. now bob would say, we were too busy dealing with who we need to get the thing up and running. if you notice, we're not talking about blood on the street here. unlike the facebook ipo or ion the flash crash or even the knight securities implosion all major technological screw ups
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there is no blood on the street here. i don't hear people talking about losses. >> right. >> so i mean, that's a good thing. tracy: great thing. >> people are back in the markets. you know, but one of the issues here, i will ask him about this because i'm scheduled to speak with him, could you have done a better job communicating to everybody else? like kept us in the loop. ashley: right. >> we're fixing this, moving forward. maybe he can't, i don't know. i'm telling you that's where, here why it matters for us not just reporters but retail investors are not in this market. tracy: right. >> retail investor is afraid to put dime into a facebook ipo, that's a huge problem for facebook to raise money. and, you know, it is one thing to be, to convince wall street you're smart. it is different with retail investors. that is where the real sort of rubber meets the road here. i will ask him about that. we should point out, i believe, my sources all these urban legend about his job being in jeopardy. it is not from what i understand. there will be some management,
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they're going to address this -- ashley: tech department maybe? >> tech department, some people have some explaining to do there and a person out of a job or two. that's what i understand. he is pretty safe. remember you go to computers you will have this i will say this, i've been harping on for days, the securities & exchange commission needs to create a blue ribbon panel to explore structure of our markets. it is more than the nasdaq and new york stock exchange. ashley: backup system. >> yes. do we have, is our technology up to standards? ashley: yeah. tracy: right. ashley: good stuff. tracy: charlie gasparino will be all over this. let us know if you get anything good out of bob. >> i will. ashley: thank you, charlie. so much more ahead on this busy news day. the dow is on track for the third straight losing week. wells starring go gina martin adams said we could have more selling. she will be here straight ahead. tracy: live at the big fed shindig in jackson hole. with fed meeting three weeks
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away, peter barnes has the story. let's check how oil is trading. dow is up 22 points. oil is up $103.86 a barrel. we'll be right back. -- $106.39.
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tracy: almost quarter past the hour. we have to get a check on the markets. nicole petallides on the floor of the exchange where we go every 15 minutes. more bad news from the retail sector, right? tracy: teenage retailers have been particularly under fire. let's look at aeropostale. another loss for them. their stock is down big-time. down almost 20%. they plan to speed up clothing so aeropostale has been downgraded. it has material risk ahead according to goldman sachs with a sell rating and downgraded at bank of america, merrill lynch. come -- abercrombie was downgraded at baird. higher second quarter profit right now. you see it is down about 1%. they did see some sales gains.
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that was good news. old navy chains and online and they are planning to raise their full-year forecast and the dividend as well. back to you. tracy: nicole, we'll see you in 15 minutes. >> great. ashley: as you can imagine tapering is great, all the talk at jackson hole where all the fed leaders are gathered. peter barnes is at the annual conference in beautiful wyoming, with a special guest. peter? >> that's right, ashley and tracy. we're welcoming larry lindsey, former fed governor. has his own shop, the lindsey group. we want to get his thoughts on tapering. we both came out of a fascinating session on all of this. so, larry, where do you stand on this tape everying debate? what should the fed do? >> i try to focus on what the fed is going to do. i think they would like to try to taper but the numbers are not just going their way. we got bad home sales numbers. >> new home sales. >> new home sales this morning. >> it was terrible. >> that is an example of the
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kind of problems tape everying is going to cause. tapering from qe, rather, will be a difficult job. that is something they should have thought about last september but it will have to happen sometime. all you're doing with monetary ease or fiscal ease is borrowing from the future and, we've been doing that for five years and sometimes, you know, the future becomes today and then it becomes yesterday and you get a little bit of a problem and that's what we're facing. i think they will try and see what the employment number is. i think we'll have to watch the markets. if the markets go down too much the fed may decide their wealth effect isn't working and may stick with the current policy. >> we've seen a backup in rates as well. that might affect the outcome as well. so, if, so if you were sitting there today, how would you try to manage this? we heard about trying better communications to the markets and investors in there.
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setting up some kind of, you know, policy for, for tapering. what -- >> well, i'm not sure it is communication. in fact i think we just heard that at the meeting. because, it is unclear what you are communicating and so it is, on not on receiving end but the delivery end. there is no clear-cut path. we have never done this before. there is no roadmap how you get out of quantitative easing and, you know, i think they're going to, you know, do what feels right and, it is very hard to communicate what feels right in advance of the data coming in. >> so would your advice be, all right, start small, maybe, cut back from 85 billion a month to maybe 75 billion or 70 or, you know, just start carefully and slowly and react. >> i'm not in the mode of giving advice, however -- >> biel take it. >> if you real it back, the first time, you know, something called decisional sis right.
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you make the decision. you think through all the steps before you make the step. they made a step last december. they decided they would basically do whatever it takes, a trillion a year in purchases in order to get the unemployment rate down. they made a little progress on the unemployment rate but not enough. so just, just speaking of decisional sis if you decide to let the genie out of the bottle last december you might as well get your three wishes before you put him back in. that is different than saying should they have let the genie out of the bottle because they did? they might want to consider not tapering and be consistent about their policies. i'm not a supporter of tapering, i wasn't in december but if you made the decision to do it because you thought it would work you may as well see it through because if you don't see it through you will guaranty it won't work. >> should investors be prepared for a lot more volatility and
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buckle your seatbelts? >> i think it is buckle your seatbelts time. i'm not sure the fed will know what it is going to do. the bond market is nervous. we can't do it forever and the question is, when do we stop it. >> the other big subject the change in leadership at the fed. larry summers, janet yellen, don kohn, what are your thoughts? >> they're all good friends of mine. i've known larry for 35 years. i served with janet and don. i'm certainly not going to take sides. i do think that one heard loud and clear at dinner after a couple of glasses of chardonnay last night the president really did not want to handle this well. to have the president say things what he said about the current chairman, you don't do things like that. he basically opened pandora's box on the issue without having thought through how i would move i was surprised to hear you have a campaign going on. that is a bit unseemly for the institution and i think the institution has been a loser from this vociferiousness of the
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campaign. >> does it hurt the ability for the fed to execute policy? >> it doesn't right now. it may in the long run. one of the concerns on a lot of people's mind is not just the chairmanship but there will be probably at least four vacancies on the fed. the three guys who are left have a total combined tenure of seven years. so you're basically wiping out the institutional memory of the board of governors and i think that is a bit of a risk going forward. >> on that note, sir, we will head off to lunch and listen to the managing director of the imf, christine la guard who may have a few thoughts or two on tapering and monetary policy and other issues. larry lindsey. thanks so much for joining us. >> my pleasure. >> back to you twice in new york. ashley: thank you very much, peter. larry lindsey has certainly strong thoughts on who replaces ben bernanke and how that is all being played out. really highlighting the uncertainty, i don't know what we're going to do with the tapering. >> no answers. all good though. coming up, another down week
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for the dow. wells fargo's gina martin adams says there may be more ahead and she is here next. ashley: as we head out to break let's see how the u.s. dollar is moving right now as we finish off what would normally be a quiet week in august. what a week. most of the currencies moving higher against the u.s. dollar. just the british pound down a bit. we'll be right back. right now is being streamed. a quarter million tweeters are tweeting. and 900 million doars are changing hands online. that's why hp built a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this&is gonna be big.
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ashley: despite getting a boost from microsoft today, the dow is on track for its third straight losing week and our next guest sees further weaknesses ahead for stocks. joining us gina martin adams, senior equity strategist for wells fargo securities. gina, thank you for being here. you're not that confident or optimistic looking ahead. we've seen a pullback of the dow is down for the last three weeks. how much further down do you think we could go? >> my price target end of the year is 1440 on s&p 500. it is not a pretty picture. basically a reversal of gains we had to date. ashley: why. >> slightly positive but not 20% higher. ashley: what is driving us down. >> at love different factors. look what boosted stocks first half of the year.
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multiple expansion, very little earnings growth. that means in the second half the vulnerable part of the market is probably the multiple. hopefully earnings pick up to make for loss of support in the multiple. we'll see. we think the multiple likely contracts because interest rates are already well ahead of stocks rising pretty quickly. that will have implications for confidence in the multiple in the second half of this year. ashley: we got housing numbers today which were awful the your point in your notes you believe this could be a major drag, the housing market on the overall economy? >> yes. think about what really drove that increase in confidence, it drove investors to equity markets. ashley: yeah. >> part of it is the housing market. a lot of recovery in housing made individuals confident in the economy and stock market to some degree. ashley: yee. >> if the housing market starts to stumble second half the year looking increasing likely. ashley: rise in rates. >> exactly. typically what you see, we've seen interest rates rise 80
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basis points. typically 100 basis point in interest rates results in 5% housing decline sales in next three to six months. we'll most likely see housing sales take a bit of a dip. not a debacle for housing but it is a dip. that is not certainly priced into expectations which seem very high right now. >> how do you protect your portfolio? what is the best way to play this? >> within the equity market we think you really stick to highest, fastest earners and most stable earners in the index. those that do best when interest rates are rising. that points you immediately to financials as opportunity here. ashley: okay. >> the sector has done pretty poorly in the which may provide opportunity for investors. financials get more profitable. financials could do well. we think some more consumer staples and health care names, old boring names within the index. ashley: more defensive in nature. >> still with defensive earnings
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power can do pretty well in this environment. ashley: of course we have the budget battle coming up in washington but the whole issue of tapering i'm told every day it is baked into the market but still a a market driver. when we hear larry lindsey talking to peter barnes in jackson hole. that lead to confusion. how to get out of this qe smoothly. >> i think it will be very rockily fall. as much as everyone likes to say it is all priced in, the direction of interest rates and equities moved incredibly close correlation throughout the month of august. we certainly were not priced in coming into august. maybe we're pricing in a little bit of tapering as time goes on. ashley: yeah. >> i don't think anyone knows exactly what the fed is going to do including the fed themselves, they include to tell us we're data dependent. we don't know for sure this may go up to the wire in september and may not even know. ashley: we may get a lousing jobs report on september the
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6th. get a decision on the 18th. is there a chance they back off. >> sure, sure. they made sure to tell us. ashley: good for the markets in one sense but also says the economy isn't so great which is not good. >> exactly. think we're kind of in a rock and a hard place type of situation at this point. we need to taper. we know eventually it needs to come. but at the same time we need economic data to get better to drive earnings growth. where do we go from here? it will be more -- ashley: quickly we're out of time. had guests say, you know what? look at europe. it is coming around. there are opportunities. would you agree with that. >> there are early stages. it is really difficult to sort of -- ashley: pick and choose, yeah. >> we had one month of pretty good data in europe. ashley: that does not make a trend. >> we hope it become as trend over time but too early to jump on that bandwagon. ashley: we're out of time. gina adams, thanks for being here. >> thank you. tracy: we're coming up 90
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minutes to the close. nicole petallides on floor of the exchange. only up 20 points but we're up. we'll take it. >> i was adding 20 points to the 658. just doing the math. we're up right now, 700 points, not up, down, for three weeks. so let me say that again. this didn't come out right. over the last three weeks, we've been selling off and it is worth abouthundred negative dow points. today, microsoft is helping to keep the dow afloat but you do have plenty of names with down arrows. many retailers remain under pressure. another name that's been under pressure, has a lot of listeners, making some money, pandora down 12% today. they came out with their numbers of the company reported a bigger loss than expected from a year ago so that was not good news there. revenues rose as i noted. they did see expenses on the rise and that's something that hit them ultimately. they're trying to acquire more
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music. that costs money and they backtracked on the 40-hour limit. that is one good thing for all those that enjoy the streaming music of pan score a. tracy: good stuff, nicole. see you in a bit. >> thanks. ashley: on deck, more on the housing rout. homebuilders plunging along with new home sales. are any of these stocks safe to buy? we'll have an analyst weighing in next. tracy: first let's take a look at some of today's winners and losers on the s&p 500. no surprise, microsoft is up top, up 7.3%. we'll be right back.
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tracy: some breaking news.
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crude closing of $1.39. today's close is a gain of over 1.3%. ashley: new-home sales plunging. jeff flock is in geneva, illinois with the very latest. jeff: i am looking at the blueprints. we are out in the chicago suburbs. the numbers we are seeing is not matching the numbers we are seeing on the ground. >> we see an uptick in resurgence. jeff: take a look at the numbers. we have seen a nice comeback.
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we have seen people that are coming out continually to try to take advantage of what are still historically low interest rates. >> they want what they want. a lot of people would prefer to have a new home. jeff: you see the ones that you are in the process of completing. a five month supply of new homes. does that worry you? >> it does not, actually. we have seen some economic suggestions. everyone we are talking to feels very comfortable with the idea that they will sell their current home.
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jeff: thank you. the big homebuilders tend to take it on the chin. out here they say and you see it is still humming. we will see where it goes from here. ashley: jeff flock, thank you very much. charlie gasparino just getting off the phone with the nasdaq ceo. charlie: you caught me just staring at my phone. a quick and dirty interview. the sec is now getting into the act. i have been talking about this for days. it is big news.
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i think bob did a great job commuting to the street. i knew what was going on. i kind of understood. he fell down communicating this directly to the retailer. they are looking for ways to better communicate directly to the small investor. technology will blow up all the time. he did not cause this to blow up. a lot of finger-pointing going on here. lastly, i asked him about a potential direct edge burger. he said it was long expected. he also said that it was good for the markets.
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he did not see it as a huge competitive threat. i asked him about management change. he kind of danced around it. the big news is the sec, they will convene some meeting of the minds among the exchange operators to come to terms with the types of markets that we have now. they will probably get into the whole structure of the market. that is under the new chairwoman, mary jo white. barry schapiro kind of pumped the blow with that. this has become a catalyst.
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that is what bob greifeld told the fox business network exclusively. ashley: thank you, as always. tracy: we will talk more about these housing stocks. taking a tumble today. ashley: time to check these ten and 30 year treasuries. down seven basis points. 3.80%. ♪ ily reunion. you must be garth's father? hello. mother. mother! traveling is easy with the venture card because you can fly any airline anytime. two words. double miles! this guy can act. wanna play dodge rock? oh, you guys! and with double miles you can actuay use, you never miss the fun. beard growing contest and go!
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♪ >> i am jo ling kent with your fox business brief. stocks are posting the hottest games. stocks are still on a third straight losing week. moody's is putting the bank inside of other large banks. of those things, goldman, jp morgan chase, morgan stanley and wells fargo are under review with downgrade implications. thinking interns are well-known for logging long hours as part of their job.
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tracy: let's get back to today's housing report. our next guest actually says that she saw this coming and this could be the first step down. you saw this coming. why? we went too far too fast. >> we went too far too fast. growth rates were unsustainable. i think what is happening is we are just getting back to a normalized rate of growth. housing is not dying, it is still growing. tracy: we are low; right?
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>> we are still pretty low. we have a long way to go. we know the economy is not moving. what was helping us before was very, very cheap money. we are seeing a bit of a slowdown. it is natural. it is not unhealthy. you say they broke the group a little bit. i said this earlier, maybe i am ridiculously old, i still remember my 9% mortgage. >> yes. [laughter] they are relatively good rates compared to history. if you think about the combination, home prices are
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with the mortgage included, 18% more expensive than they were just six months ago. you have to factor that into your equation. tracy: what happens to the homebuilders sector? >> i think you wait. i think there will be a time to invest in these. they were priced very aggressively. i am looking at my estimates again. what if i bring my volume down? it will take the market some time to digest the new numbers, figure out what the homebuilders are doing in this new environment and then put in efforts and see where they are.
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i would buy them now. you do not need to rush them right now. i think that they will build next week. i think a luxury builder will not have the exposure to the luxury rate. they will trade with the rest of the group. there is no reason to trade right now. tracy: that is good advice. thank you for being here. ashley: it is a little after quarter till the hour. let's head down to the new york stock exchange. we are treading water. does the home data delay
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tapering? >> i do not take so. the fed is understanding it has just about run its course. it has not been finding its way into the rest of the economy. they need to let the markets clear. they need to let the yield curve get back to a more normal level. ashley: i think the fed wants to get the heck out, it is just how do you do it smoothly. [laughter] tracy: we have not talked about this in a long time. we have another state giving a clear incentive to residents. "wall street journal" steve moore is on that story next. ashley: first, let's take a look at some of today's winners and
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losers. take a look. we will be right back. ♪ this man is about to be the millionth customer. would you mind if i go ahead of you? instead we had someone go ahead of him and win fiy thousand dollars. congratulations you are our one millionth customer. nobody likes to miss out. that's why ally treats all their customers the same. whether you're the first or the millionth. if your bank doesn't think you're special anymore, you need an ally. ally bank. your money needs an ally. every day we're working to and to keep our commitments. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years -
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tracy: when it comes to a state tax or death tax, some states are simply way more expensive than others. steve moore has written about this. he joins us now. first of all, many states, i should say, some states, still follow the tax. other states kind of have their own rules.
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>> if you are such a tax expert, what are you doing living in new york? [laughter] >> you have some of the highest tax rates in the country. what we found is they change the tax law for the states back in january of 2013. you have my home state of illinois and 15 or 16 others that still impose very high estate taxes. they are moving out of their
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states. tracy: aside from the fact that you can pass it on to your spouse and get the exemption, thresholds have gotten so much smaller. i love in your notes, the grand prize goes to minnesota for their gift tax abuse. >> yes. why in the world would you die in new york? why would you die in
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connecticut? illinois? these taxes make no sense whatsoever. you do not get the sales tax revenue, tax revenue while they are still alive. tracy: that is the part that bothers me the most. they can figure out a way to avoid them. then it comes down to the middle class. we get screwed at the end of the day, if i can say that, and i did. [laughter] >> people move out. they take their wealth. they take their business. you have 30 states that have no death tax at all.
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a big difference between zero and 16%. tracy: my state actually charges you to leave it. >> that is the next big thing. tracy: i tell you, i am going to florida. have a great weekend. >> now you have two reasons. aahley: coming up on "countdown to the closing bell," hear what bob griese held told liz claman once the cameras stopped rolling. we will look at what it could mean for the future. we will be right back.
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♪ liz: good afternoon on this friday, i'm liz claman, the last hour of trading, another huge day for investors after yesterday's flash freeze at the nasdaq freezing the exchange and trading on it. big changes coming to one of the most profitable companies. steve balmer, long time ceo of microsoft announces plans to step down within the next 12 months. how do investors view balmer? look at the stock move. they are happy he's moving on. stock is jumping seven and a quarter percent making him a much wealthier man because he owns so much stock in it, but as it shoots higher, that represents 19 points of the dow's 23

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